Quiz Ch 11 – T/F Rationality of Reinvestment Assumptions in NPV and IRR Methods
Fundamentals of Financial Management, Concise
Brigham and Houston
09th Edition
True or false: The NPV method’s assumption of reinvesting at the cost of capital is usually more valid than the IRR method’s assumption of reinvesting at the IRR. This underscores the NPV method’s preference over the IRR method.